Category: Credit Score

Your credit score may be the single most important piece of financial information about you, as it often decides whether you qualify for loans, credit cards, and a mortgage. If you check your score regularly (as you should!), you may have noticed discrepancies between Equifax and TransUnion scores. Don’t panic! There are a variety of reasons your score may differ slightly between credit bureaus, and most of them are benign and won’t hurt your score.

However, if you notice large discrepancies, always contact your credit bureau to rule out credit fraud.

Reasons Why Credit Scores Vary

Types of Data & Information Provided to Credit Bureau

Credit bureaus primarily base your credit score on information they receive from lenders, and not every lender or creditor sends reports to all credit bureaus. Sometimes a lender will only provide data to one bureau, or they will send reports to bureaus at different times. This can lead to discrepancies between various credit bureaus.

Differences in Credit Checks

In the world of finance, there are two types of credit checks: “soft” and “hard.” When you check your credit score through an online report, this is considered a soft credit check. Soft credit checks do not affect your credit score.

Hard checks, on the other hand, are formal requests from credit bureaus to examine your credit score and history. These checks are usually conducted when you apply for a loan, credit card, or mortgage.

Multiple hard checks at once can damage your credit score because bureaus monitor these checks to learn about consumers who may have a higher debt load than they can handle or may be short on funds. These consumers are a higher risk for lenders, and their credit scores will reflect this reality. As a result, it’s best to only apply for credit that you truly need.

Differences Between Credit Scoring Models

Not all lenders or creditors use the same scoring models, and this can lead to discrepancies in your credit scores. In Canada, most lenders use the FICO scoring model, but there are dozens of other scoring models out there, all of which evaluate criteria slightly differently. There are even variations between different FICO models!

Date of Comparison

Not all credit bureaus update scores at the same time. Depending on when you view your credit report, you may notice discrepancies between bureaus because one score has not been updated as recently and is outdated. Try checking again at a later date to see if the discrepancy corrects itself. If it doesn’t, contact the credit bureau directly.

Build Credit Towards a Home with JAAG Properties

If you are struggling to qualify for a mortgage due to bad credit or no credit, we can help! Our Rent to Own program was designed with you in mind, allowing you to live in your new home while you build good credit and save money for a down payment. Apply online today or contact us for a consultation!

People have credit issues for a variety of reasons. Divorce, job loss, and other financial hardships can wrack up debt quickly. Whatever your reason, it’s never too late to improve your credit score, and we’re sharing our top tips for bringing up those numbers, allowing you to qualify for mortgages, loans, credit cards, and more.

Understanding Your Credit Score

You can’t learn how to improve your credit score if you don’t know what the numbers mean! Familiarize yourself with credit score ratings, including what is considered low or high. In Canada, there are two credit bureaus that report your credit score: Equifax and TransUnion.

Credit Score Ratings

300 to 560: Poor
561 to 659: Fair
660 to 724: Good
725 to 759: Very Good
760 to 900: Excellent

It’s recommended you maintain a credit score of at least 660, since most lenders won’t approve you for credit cards, mortgages, or loans with a lower score. Of course, the higher your score, the better financial services you’ll have access to, including lower interest rates when you go to purchase a home.

How is Your Credit Score Calculated?

Put simply, your credit score is a measure of how you use credit. It’s calculated based on a variety of factors, including how much credit you have, how much debt you’re carrying, and your payment history.

Tips on How to Improve Your Credit Score

Pay Your Bills on Time

Your payment history is a major consideration for any lender. If you consistently make payments on time, especially if you often pay in full, it reflects well on your ability to manage your credit responsibly. If you’re forgetful, set up automatic payments to ensure that you still make payments on time.

Keep Your Credit Utilization Score Low

Maxing out your credit signals to lenders that you have difficulty managing your debt load and you may struggle to make payments on new loans. In general, you should try to keep your credit usage under 30% of your total limit.

Limit the Number of Credit Applications You Submit

When you apply for credit cards or loans, choose wisely. Each application results in a hard inquiry, which can lower your credit score. Limit how often you apply for new accounts and don’t send out more than one application at a time.

Review Your Credit Reports

Knowledge is power! Review your credit score regularly and check for evidence of identity theft or fraud. Any inconsistencies should be reported to your financial institution immediately.

You should also look for unpaid balances or accounts that have gone into collections. Clearing outstanding debt is one of the easiest ways to improve your credit score.

Beat Bad Credit & Rent to Own a Home with JAAG Properties

If you’re struggling with no credit or bad credit, you don’t have to abandon your dreams of homeownership. Our Rent to Home Solution is designed to help you build positive credit, increase your credit score, and own your home faster!

Contact us today to learn more about how we can guide you through the homebuying process.

Some might think that having bad credit means they can only rent and will never be a homeowner. No need to fret. There are solutions for getting into homeownership with bad credit. Read on to understand ways that homeownership is accessible despite financial challenges.

Partner Up for a Mortgage

This might be done with a partner or relative prepared to co-sign the loan agreement. By pooling your resources with another person who has strong credit, you can access a loan with better terms and interest rates, turning the challenge of bad credit into an achievable goal of homeownership.

Explore Private Lender Options

When it comes to giving money, private lenders are usually more open than banks. They may be willing to look past your credit score. Use caution and do your research since private loans may have greater costs and interest rates.

Boost Your Credit Score

One of the key actions that you can do to get a mortgage, is to raise your credit score. First, look over your credit report for mistakes. If you find any, fight them. Your score can slowly increase if you pay your bills on time and get rid of debts. Long-term benefits include better borrowing choices and cheaper interest rates, but this method takes time and discipline.

Increase Your Down Payment

Another option is to save up for a bigger down payment, so the loan amount goes down. In this case, loan terms might improve, like interest rates decreasing. A big down payment can also show lenders that you know how to handle money well, which could help if you have bad credit.

Consider Rent-to-Own Agreements

Rent-to-own agreements are an additional option for those with poor credit, to become homeowners. You agree to rent the residence for a certain period (usually for 3 years). When this period is completed, you purchase the home for the agreed upon amount. Often, a portion of your rent is used for a down payment or deposit. With a rent-to-own agreement, you can purchase a home, and raise your credit score simultaneously.

Stepping Stones to Homeownership

Each option needs careful thought and research. Exploring these options opens the door to potential homeownership, breaking down the barriers imposed by credit challenges. It’s about matching the right strategy to your financial situation and moving forward with informed decisions and steadfast determination. JAAG Properties can be a valuable resource in this journey.

Are you ready to turn your homeownership dream into reality with JAAG Properties? APPLY NOW

An understanding of what is included in your credit report is essential for navigating complicated financial decisions.

Explore the specifics of a credit report to better understand how it affects your opportunity for homeownership.

What is a Credit Report?

A credit agency creates detailed credit reports of people’s credit history. Creditors, landlords, and certain employers use this financial statement to assess creditworthiness. Understanding your credit reports is the first step to financial management. Credit history includes late payments, defaults, and bankruptcies.

How is a Credit Report Used?

A credit report helps creditors determine your borrower risk and set loan terms, including interest rates. Real estate companies examine buyers’ and tenants’ credit to ensure trust and financial stability. Better loan conditions, lower interest rates, and faster housing approval might make buying your dream home easier and more attainable after credit repair.

However, bad credit can lead to higher interest rates or loan denials, limiting purchasing power and real estate market options. Knowing how your credit report affects you and taking steps to improve it can improve your financial future.

What Information Appears on Your Credit Report?

A detailed account of your financial stability and reliability can be found in your credit report information. What’s usually included is as follows:

Personal Information

Name, address, date of birth, Social Insurance number, and job details. This data provides a solid basis for your financial records by confirming the authenticity of all credit information about you and assisting with your identification.

Credit Accounts

This section lists your mortgages, school debts, auto loans, and credit cards. It includes account type, opening date, credit limit or loan amount, balance, and payment history, giving a thorough overview of your credit commitments, both past and present, and your credit management skills.

Credit Inquiries

Each credit card or loan application requires a credit report. Lenders may view a high volume of inquiries as a sign of increased risk.

Public Records and Collections

This includes lawsuits, wage attachments, liens, judgments, bankruptcies, and foreclosures. Your credit score may suffer significantly due to these entries, demonstrating the seriousness of financial hardship or unfulfilled obligations.

Empower Yourself with Credit Knowledge

Understanding your credit report is vital for making informed financial decisions. Reviewing your report helps identify errors, understand your credit history, and see how your actions affect your score. Remember, your credit report is key in shaping your financial future as a foundational element in your homeownership and financial stability journey.

Ready to take control of your financial journey? APPLY NOW